Transfer of Equity: Your Questions Answered

At Blythe Liggins, we understand that navigating property law can sometimes feel a little complex. That’s why one of our expert Conveyancing Team has put together this Q&A to shed some light on transfer of equity, a process that often comes hand-in-hand with remortgaging.

Q: What exactly is a “transfer of equity”?

A: Simply put, a transfer of equity is the legal process of adding or removing someone from the ownership of a property. This means changing the names registered with the Land Registry as the legal owners.

Q: Why might someone need a transfer of equity?

A: There are several common reasons, including:

• Relationship changes: Perhaps you’re getting married or entering a civil partnership and want to add your partner to the property deeds. Conversely, if a relationship ends, one party might transfer their share to the other.
• Gifting equity: Parents might wish to add a child to the property title, or vice versa.
• Tax planning: In some circumstances, transferring equity can be part of a wider tax planning strategy.
• Remortgaging: Often, when you remortgage, the lender will require all legal owners to be party to the new mortgage. If the ownership structure is changing at the same time, a transfer of equity will be necessary.

Q: How does a transfer of equity differ from selling a property?

A: This is a key distinction. With a sale, the property is transferred to a completely new owner. In a transfer of equity, at least one of the original owners remains on the title. No external buyer is involved.

Q: Can I do a transfer of equity myself?

A: While it might seem straightforward, property law is intricate. A transfer of equity involves legal documentation that needs to be precisely drafted and correctly registered with the Land Registry. Errors can lead to significant complications and costs down the line. Engaging a solicitor ensures the process is handled correctly and your interests are protected.

Q: What’s involved in the legal process of a transfer of equity?

A: Typically, the process involves:

• Taking your instructions: We’ll discuss your situation and the reasons for the transfer.
• Reviewing the title: We’ll examine the current ownership details and any existing mortgage.
• Considering whether Stamp Duty Land Tax (“SDLT”) may be payable: SDLT may be payable in transfer of equity transactions and this is dependent on not only the amount of any consideration being paid (if any) but also in respect of any existing mortgage debt that one party may be taking on.
• Drafting the transfer deed: This is the legal document that formally transfers the ownership.
• Liaising with the mortgage lender (if applicable): If there’s a mortgage on the property, we’ll need to obtain their consent for the transfer. This is particularly relevant if you’re also remortgaging.
• Arranging for signatures: All parties involved will need to sign the transfer deed.
• Submitting the application to the Land Registry: We’ll ensure the transfer is officially registered, updating the legal ownership records.

Q: How long does a transfer of equity take?

A: The timeframe can vary depending on the complexity of the situation and whether there’s a mortgage involved.  Also, the cooperation of any third party.  Generally, it can take anywhere from a few weeks to a couple of months. If it’s linked to a remortgage, the timescales will often align.

Q: What are the costs involved in a transfer of equity?

A: The costs will depend on the specific circumstances but typically include:

• Legal fees: Our fees for handling the legal work.
• Land Registry fees: These are payable to register the change in ownership.
• Stamp Duty Land Tax (SDLT): A stated above, SDLTmay be payable in certain circumstances, for example, if money or debt is exchanged as part of the transfer.

Thinking about a Transfer of Equity alongside Remortgaging?

Often, a transfer of equity is carried out at the same time as remortgaging your property. Whether you’re adding or removing a partner from the mortgage, or simply looking for a better deal, our experienced conveyancing team at Blythe Liggins can guide you through both processes seamlessly.

 

Get in Touch

If you’re considering a transfer of equity in Leamington Spa or the surrounding areas, our friendly and knowledgeable team at Blythe Liggins are here to help. Contact us today for a no-obligation discussion about your needs.